Why and how do economic problem arise?
What will be an ideal response?
Answer: All economic questions and problems arise because human wants exceed the resources available to satisfy them.
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PSD areas
a. must meet the same standards as do nonattainment areas b. face standards that are necessarily set at an efficient level c. are regions that meet or exceed national ambient air quality standards d. are likely associated with higher MSC than that of nonattainment areas
Suppose that real GDP is initially $13 trillion and the government attempts to increase real GDP to $14 trillion
The marginal propensity to consume is 0.75, and every $1.00 increase in real government spending crowds out $0.50 in real planned investment expenditures. How much increase in real government spending could lead to the desired level of real GDP? A) $200 billion B) $250 billion C) $500 billion D) $1 trillion
If a rise in the price x causes less y to be demanded:
a. x and y are gross complements. b. x and y are gross substitutes. c. x and y are net complements. d. x and y are net substitutes.
Fighting inflation by slowing the growth of aggregate demand is
a. endorsed by most politicians. b. a convenient way to reduce inflation. c. unpopular with politicians. d. always easily accepted by firms and workers.